5.17.2017

Finding the next Amazon.com, which first sold shares to the public 20 years ago this week, is hard. In fact, finding the last Amazon was hard, too. From 1926 through 2015, only 30 stocks accounted for one-third of the cumulative wealth generated by the entire U.S. stock market; Amazon was one.

That’s 30 out of a grand total of 25,782 companies that were publicly traded over that period.​
The search might not be completely futile, but many investors are going about it the wrong way. That’s because the average return of the stock market, and the return of the average stock in the market, are nothing alike. Even though the stock market generates positive average returns over time, more than half of all stocks lose money over their lives as public companies, and the number of stocks that make big money is astonishingly small.
...

Amazon beat the return on cash by an average of 36% annually through the end of 2015, the highest rate among any of the superstocks, his research finds. (Altria Group grew at a lower rate but, because it was around for all nine decades, increased investors’ money more than 2 million fold.)
“How hard it is to envision how great a great company can become!” says James Anderson, a partner and senior investment manager at Baillie Gifford & Co., an Edinburgh-based firm that has owned Amazon stock since 2004 and is now the eighth-largest institutional holder of the shares.
All that time, he recalls, Amazon offered “no earnings and no guidance,” which ensured that even as the stock rose over time, “there wasn’t an excess of enthusiasts or an absence of shorts” who were betting against it.

Comment: JCP IPO'd on January 13th, 1978. AMZN: May 15, 2017 — is the 20th anniversary of Amazon.com Inc.'s (Nasdaq: AMZN
Amazon.com Inc
AMZN
944.76
-2.21%
) initial public offering (IPO). Those in the investment industry know that Amazon has been a hot stock for quite some time. However, this was not always the case. When Amazon first went public in 1997, its stock was priced at just $18 per share.
From that modest beginning, the online retail giant has seen its stock skyrocket, despite a rocky period during the dot-com crash. In fact, if you had invested just $100 in Amazon's IPO, that investment would have been worth $63,990 by close last Friday.
On the 20th anniversary of its IPO, the stock price opened at $958.68, slightly under the all time high the previous week at $962.

I have neither JC Penney nor Amazon. I can tell you that had I been investing 20 years ago, I wouldn't have given AMZN a second look. I could have bought it 5 years ago but passed. Missed opportunity!